B2B Payments

Finding Some B2B Tech Cheer On Wall Street

Not all is lost for investors. A trio of tech companies, with insight into lending and B2B, posted results that were better than many had hoped.

The obituaries lamenting the death of tech spending may be somewhat premature, if recent results in B2B software and alternative finance are any indication. And in the case of those firms that are publicly traded, Wall Street cheered the numbers.

LendingTree: Profits Take Root

Perhaps the most impressive reaction came in the wake of earnings posted by mortgage lending servicing company LendingTree, which saw investors bid up the shares by more than 22 percent to a recent $85. The top line was up more than 79 percent year over year to $78 million, which topped The Street by $1 million. The company saw growth in both the traditional mortgage and non-mortgage divisions.

The latter segment saw revenues grow by $10 million to $31 million. That may have cheered observers looking to see multiple engines of revenue traction working in tandem. And management noted on the call that more lenders are working to get presence on its platform. Results were strong enough so that the firm felt sanguine enough to add a $40 million buyback on top of an initial earlier $50 million buyback. EBITDA, a closely watched metric among investors and a rough proxy for free cash flow, grew 100 percent year over year.

Salesforce Gathers Steam In The Cloud

Separately, with a less stellar stock bump but still impressive to the tune of 11 percent, Salesforce, which makes software that is geared toward cloud computing and back-end office functions, reported a revenue beat that paled in comparison to guidance. The top line, as reported for the fourth quarter, was $1.81 billion, while The Street had $1.79 billion estimated.

The company said on its call that it is looking for first quarter earnings to fall between $0.23 and $0.24 per share, better than the $0.21 consensus, and the top line should be $1.885 billion to $1.895 billion, while projections by analysts were $1.86 billion. One key to success, according to Chief Executive Officer Marc Benioff, has been the fact that the company has been able to take business away from large incumbent tech firms, such as Oracle, (and business outside the United States has been strong, which may cheer up at least some fretting about the state of business investment in the sector amid worries about a global slowdown). But the inexorable trend has been in place as the firm has been enjoying the shift by customers to cloud software, especially among sales and marketing products — speaking well to the B2B tech replacement cycle that companies are pushing to help make sense of the data that crosses servers and other information conduits.

MYOB Mind Its Business With Aplomb

And finally, the stock of MYOB, listed in Australia, brought up the rear, with a roughly 2 percent gain to A$2.90 after posting results, but it is the timbre of results that speak for themselves. The cloud accounting software firm, the largest in Australia, said that its results for 2015 exceeded expectations (internal ones), after taking out costs related to its initial public offering last year. The net income was up 22 percent year over year, to as much as $86 million. The online subscriber growth has been healthy at more than 46 percent year over year, and there is also growth in a paying customer base that is a bit more than half a million strong, with most of that coming through the small and medium enterprise space. Key tailwinds include tax and regulatory compliance efforts of these smaller players, and management has stated that business confidence in the country is at the highest level seen in five years (which, in turn, suggests that they are growing and need to invest in technology alongside that growth).

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